Notes payable

12 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Notes payable

8. Notes payable

As of June 30, 2019, notes payable consisted of the following:

	June 30, 2019			June 30, 2018
Senior Secured Promissory Notes, bearing interest at 12% per annum, payable monthly. The Senior Secured Notes mature on December 31, 2018 and have conversion rights at $.16 per share.	$	-		$	23,000
Robofusion note payable, bearing interest at 3.25% per annum. Principal and interest is due quarterly through September 2020, net of discount of $49,710 and $99,426, respectively.		1,092,021			1,342,132
Promissory Note, non interest bearing. Principal is due monthly, over an 18 month period, net of discount of $21,000 and $0 respectively.		259,000			-
		1,351,021			1,365,132
Less current maturities		(1,314,021	)		(629,017	)
	$	37,000		$	736,115

Maturities of the notes payable, are as follows:

2020	$	1,314,021
2021	$	37,000
	$	1,351,021

Senior secured promissory notes

On February 25, 2014, we issued Senior Secured Promissory Notes (the "Initial Notes") to three investors in exchange for cash totaling $501,000. The Initial Notes were set to mature on February 24, 2015 and bear simple interest at a rate of 12% paid monthly over the term of the loan. The Initial Notes also provide that our Company can raise up to $1.5 million in proceeds from the issuance of additional notes (the "Additional Notes") which would have the same seniority and security rights. The Initial Notes are secured by substantially all assets of the Company. On September 23, 2014, the holders of the Company's Initial Notes extended the maturity date from February 24, 2015 to March 15, 2016, and on March 15, 2016, the Notes were further extended to September 30, 2016. The notes aggregating $334,000 have been further extended to December 31, 2018 and $167,000 of the notes, plus accrued interest, were converted to common stock at $.16 per share on January 20, 2017. The remaining outstanding notes, aggregating $334,000, have been granted conversion rights at $.16 per share. The conversion right granted was fixed at the closing trading price of the stock. As a result, the Company determined that the conversion right was not a derivative in accordance with ASC 815, Derivatives and Hedges, the host instrument was conventional convertible, and that no beneficial conversion feature was present. The modification of the debt terms was not deemed substantive and therefore, was not accounted for as an extinguishment of debt with the recognition of a gain or loss.

As of June 30, 2019, and 2018, the outstanding balance was $0 and $23,000, respectively.

For the year ended June 30, 2019, approximately $23,000 of principal and $6,000 of accrued interest was converted into approximately 179,000 shares of common stock.

As of June 30, 2019, and 2018, accrued interest was approximately $0 and $6,000, respectively.

For the years ended June 30, 2019 and 2018, interest expense was approximately $0and $31,000, respectively.

Robofusion note payable

On December 29, 2016, the Company entered into an Asset Purchase Agreement (the “Agreement”) with Robofusion, Inc. (“RFI”), whereby the Company acquired the intellectual property assets of RFI, a developer of robotic-kiosk vending technology, primarily frozen yogurt vending kiosks/cubes, using RFI's trademarked name of Reis & Irvy's (the “Acquisition”). Pursuant to the Agreement, the Company provided RFI, and its designees, a cash payment of $440,000. The Company also issued to RFI a three-year, $2 million note.

In connection with the issuance of the note payable, the Company issued a five-year common stock purchase warrant for 1,520,000 shares with a strike price of $0.50 per share. At inception, the estimated fair value of the warrant was approximately $174,000 and was recognized as a debt discount. For the years ended June 30, 2019 and As of June 30, 2019 and 2018, approximately $50,000 and $50,000 was accreted to accretion of discount on note payable in the accompanying statement of operations.

As of June 30, 2019, and 2018, the outstanding balance was approximately $1,142,000 and $1,441,000 respectively. During 2019, principal and indemnification payments were approximately $300,000.

As of June 30, 2019, and 2018, accrued interest was approximately $53,000 and $15,000, respectively. For the year ended June 30, 2019, interest payments were approximately $0.

For the years ended June 30, 2019 and 2018, interest expense was approximately $40,000 and $60,000, respectively.

Promissory note

On February 13, 2019 the Company issued a $360,000 promissory note (the “Note”) in relation to a franchisee rescission agreement. The Note is non-interest bearing and principal payments of $20,000 are due monthly over an 18-month period beginning in April 2019. Given the non-interest-bearing nature of the Note, the Company estimated assigned a debt discount of $27,000 based on an estimated internal cost of capital rate of 10%.

For the years ended June 30, 2019 and As of June 30, 2019 and 2018, approximately $6,000 and $0 was accreted to accretion of discount on note payable in the accompanying statement of operations.

As of June 30, 2019, and 2018, the outstanding balance was approximately $280,000 and $0 respectively. During 2019, principal payments were approximately $80,000.

As of June 30, 2019, and 2018, accrued interest was approximately $0 and $0, respectively. For the year ended June 30, 2019, interest payments were approximately $0.

For the years ended June 30, 2019 and 2018, interest expense was approximately $0 and $0, respectively.